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Great Northern Insurance Co. v. BMW of North America, LLC

United States District Court, D. Connecticut

March 25, 2018

GREAT NORTHERN INSURANCE COMPANY a/s/o HARLAN KENT and PATRICIA KENT, Plaintiff,
v.
BMW OF NORTH AMERICA, LLC, Defendant/Third-Party Plaintiff,
v.
PIERBURG GMBH and PIERBURG PUMP TECHNOLOGY GMBH, Third-Party Defendants.

          RULING AND ORDER ON MOTION TO DISMISS

          VICTOR A. BOLDEN, UNITED STATES DISTRICT JUDGE.

         Great Northern Insurance Company (“Plaintiff” or “Great Northern”), the insurer of real or personal property owned by the insureds, Harlan Kent and Patricia Kent (“the Kents”), has sued BMW of North America, LLC (“Defendant, ” “Third-Party Plaintiff, ” or “BMW LLC”) and BMW LLC's suppliers of auxiliary coolant pumps, Pierburg GMBH and Pierburg Pump Technology GMBH (“Third-Party Defendants” or “Pierburg Entities”). Great Northern's Amended Complaint alleges negligence, strict liability, and breach of warranty.

         The Pierburg Entities now move to dismiss Great Northern's Amended Complaint, as well as BMW LLC's Cross-Claim and Third-Party Complaint against the Pierburg Entities, arguing that this Court lacks personal jurisdiction over them.

         For the reasons that follow, the motions are DENIED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. FACTUAL ALLEGATIONS

         The Kents own a 2012 BMW 750i (“BMW”), a house, and other real and personal property. Pl.'s Am. Compl. ¶¶ 9-10. Great Northern maintains that the Kent's BMW model was the subject of a product recall related to an increased risk of fire because of a defective auxiliary coolant pump. Id. ¶ 11.

         On February 5, 2014, the Kents allegedly returned home in their BMW from a trip to Massachusetts, and parked their car in their garage. Id. ¶ 12. Sometime later, the car allegedly caught fire, and eventually the entire BMW became engulfed in flames. Id. ¶ 14. The fire and resulting smoke allegedly spread throughout the garage, to an Audi A6 car also parked there as well as to a snow blower also in the garage. Id. ¶¶ 14, 16-18. The smoke from the burning vehicles also affected the rest of the house. Id. ¶ 19.

         Expert investigator(s) allegedly concluded that the fire was consistent with similar fires involving defective auxiliary pumps. Id. ¶ 24. Great Northern alleges that the Kents and any prior users of the BMW used the car for reasonable, foreseeable, and intended purposes, and their acts or omissions were neither the proximate, direct, nor contributory causes of the fire. Id. ¶ 25.

         Under the terms of the insurance agreement with the Kents, Great Northern made payments in the amount of $339, 428.21, as compensation for the damages to the house, garage, and personal property, and in the amount of $108, 363.30 as compensation for the damage to the cars, for a total of $447, 791.52, allegedly the full amount to which Great Northern is subrogated at law and entitled to recover. Id. ¶¶ 9, 26. The Kents also allegedly suffered a loss of $1, 000.00 due to the policy deductible. Id. ¶ 27.

         BMW LLC maintains that the Pierburg Entities are the upstream supplier of the car's allegedly defective auxiliary coolant pump and that the Pierburg Entities are parties to a supplier contract with Bayerische Motoren Werke Aktiengesellschaft (“BMW AG”), the parent company of BMW LLC (“Supplier Contract”). Def.'s Cross-cl. ¶¶ 5-6; see also Def.'s Third-Party Compl. ¶ 14.

         The Supplier Contract includes a November 21, 1995, Warranty Agreement between BMW AG, its associated companies, and Kolbenschmidt AG[1] and BMW AG. BMW's Opp'n Br. at 4. The Warranty Agreement states:

In amending Section 14.3 of the BMW Purchasing Conditions, the Parties agree to the following:
If one of the Contractual Partners or an indemnifiable member of its distribution network abroad is alleged to be liable for personal injury and/or property damage due to a production defect (product-liability claim), then this Contractual Partner may, at its own discretion, also assert claims for indemnity and full or partial recourse against the other Contractual Partner at the court of jurisdiction of the main claim. This right also applies to the substantive law of the respective court of jurisdiction.

Id. (quoting 1995 Warranty Agreement § 7, BMW's Opp'n Br., Ex. A, ECF No. 68-2).

         The July 15, 1996, Warranty Agreement between BMW AG and Pierburg AG similarly states:

In amending Section 14.3 of the BMW Purchasing Conditions, the parties agree to the following:
If a contractual partner or an indemnifiable member of its distribution network abroad is alleged to be liable for personal injury and/or property damage due to a production defect (product-liability claim), this contractual partner may, at his own discretion, assert claims against the other contractual partner for indemnity and full or partial recourse also at the jurisdiction of the main claim. This right also applies to the substantive law of the respective court of jurisdiction.

Id. (quoting 1996 Warranty Agreement § 7, BMW Opp'n Br., Ex. B, ECF No. 68-2).

         The July 1, 2012, Warranty Agreement-the most current warranty agreement among BMW AG, the Pierburg Entities, and others[2]-contains a forum-selection clause that states:

Claims in connection with product liability, irrespective of their legal basis, remain unaffected by this agreement.
Should a third party make a legal claim on BMW or a company affiliated with BMW (§ 15 AktG, German Stock Companies Act) for compensation for personal and/or material damage, BMW may also take the necessary procedural steps at the relevant place of jurisdiction in order to enforce its claims against the Contractor. In such a case, the law applicable to the place of jurisdiction shall exclusively apply with regard to the parties' rights and obligations.

Id. at 5 (quoting 2012 Warranty Agreement § 7, BMW Opp'n Br., Ex. C, ECF No. 68-2) (collectively “the Warranty Agreements”).

         Furthermore, the Preamble of the July 1, 2012 Warranty Agreement states that it supersedes and replaces all prior agreements. Id. at 6 (citing 2012 Warranty Agreement § 7).

         B. PROCEDURAL BACKGROUND

         On March 22, 2015, Great Northern filed a Complaint against BMW LLC. ECF No. 1. BMW LLC ...


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